Microsoft Launches Rural Broadband Plan, But Critics Call 'Nonsense'

Microsoft's recently unveiled plan to expand rural broadband access in the United States using white space has been criticized by the National Association of Broadcasters (NAB) as being "the height of arrogance."

Microsoft is essentially proposing a combined technical approach, plus federal and state investment funding. Some of the money would come from the Federal Communications Commission's (FCC's) Universal Service Fund. The Universal Service Fund is the U.S. government's long-time effort to expand telephony access across the United States, and later Internet and broadband access. The fund comes from a percentage of interstate telecom company revenues.

The technical approach proposed by Microsoft involves using the 600-MHz TV white space spectrum, plus fixed wireless and satellite communications, to bring broadband services to about 34 million underserved Americans, with most (23.4 million) located in rural areas. The scheme is outlined in 51-page whitepaper, "A Rural Broadband Strategy," that was highlighted by Brad Smith, Microsoft's president and chief legal officer, in an announcement this week.

Microsoft Seeks FCC Help
If Microsoft can get "favorable and stable regulations" regarding the TV white space spectrum, then the industry can move forward, the company argued in the whitepaper. Radios that currently cost $800 can be brought down to $200 in a year, Smith suggested, in a Washington, D.C., presentation.

Microsoft is willing to contribute 39 of its patented technologies associated with the use of the TV white space spectrum without seeking royalty fees, even from competitors, as part of this effort. It plans to partner with organizations and promote rural broadband technical expertise via a Rural Airband Initiative philanthropic effort. One goal of the Rural Airband Initiative for Microsoft is to connect two million people in five years' time, Smith said.

Microsoft's proposal overall is a five-year plan, with elimination of "the rural broadband gap" expected by July 4, 2022. However, Microsoft has some interim plans. It has partnered with network operators and is planning 12 broadband projects in 12 states, which will be running "within the next 12 months," Microsoft promised.

Microsoft's role under the proposal will be as an investor to expand coverage.

"Our goal is not to enter the telecommunications business ourselves or even to profit directly from these projects," Smith stated. "We will invest in the upfront capital projects needed to expand broadband coverage, seek a revenue share from operators to recoup our investment, and then use these revenue proceeds to invest in additional projects to expand coverage further."

The whitepaper further clarified Microsoft's motivations. The proposal will benefit "every company in the tech sector that provides cloud services, including our own," Microsoft indicated.

Three TV white space channels are needed across the country to enable the scheme. Microsoft specifically wants the FCC to protect access to two channels that have already been made available by the FCC for broadband access. Next, Microsoft wants the FCC to add access to a third channel, known as the "vacant channel." In an earlier period, the vacant channel had been used by TV broadcasters to avoid interference, but it isn't being used now. The idea is explained in this 2013 Microsoft exec interview.

Microsoft's whitepaper claims that the use of the vacant channel won't mess with TV broadcaster operations.

"Preserving this channel will not impact any full-power broadcaster," the whitepaper stated.

The NAB Objects
The NAB, though, seems to disagree. Dennis Wharton, NAB's vice president of Communications, offered a sharp critique of Microsoft's proposal, suggesting that use of the TV white space spectrum would interfere with TV broadcasts:

It's the height of arrogance for Microsoft -- a $540 billion company -- to demand free, unlicensed spectrum after refusing to bid on broadcast TV airwaves in the recent FCC incentive auction. Microsoft's white space device development has been a well-documented, unmitigated failure. Policymakers should not be misled by slick Microsoft promises that threaten millions of viewers with loss of lifeline broadcast TV programming.

The claim that Microsoft failed to pay for auctioned 600-MHz spectrum was echoed in an NAB editorial by Patrick McFadden, the NAB's associate general counsel. He described the notion that the TV white space vacant channel could be used for broadband services without broadcaster interference as "nonsense on its face."

Microsoft had an oblique response to the NAB's critique. In his presentation, Smith claimed that just a small amount of spectrum associated with TV broadcasting was at stake.

"Before we all spend time fighting with each other over six megahertz, one channel, because that's what the so-called debate with the NAB is all about...let's reflect on one fundamental fact," Smith said. "There are 23.4 million Americans that cannot do what each of us may be doing right now and that is accessing a broadband connection, even through a wireless device. So, if we do nothing else, let's resolve that this is a problem that needs to be solved and that we will work together to solve it."

Smith invited the NAB to work together and not just "hurl insults." He added that 200MHz already has been allocated to broadcasters who aren't paying for the spectrum. Microsoft is just calling for 18MHz to be owned by the public, he said.

Dynamic Spectrum Access
The heart of Microsoft's focus in using the TV white space spectrum is its software defined radio efforts. With this approach, "dynamic spectrum access" technology is used to avoid interference in the band. In essence, dynamic spectrum access is a database containing channel frequencies that can be used when interference is detected, enabling automatic wireless hops. Microsoft has been running tests on the technology since 2008, and is currently using it with TV white space spectrum to deliver broadband service in 17 countries.

"Microsoft itself has considerable experience with this spectrum, having deployed 20 TV white spaces projects in 17 countries that have served 185,000 users," Smith wrote.

The TV white space spectrum is particularly available in rural areas. It has the benefit of enabling broadband at longer distances than Wi-Fi, with better penetration through obstacles. Microsoft wants the FCC to fund whichever technology works best for an area, adding that it could cost between $10 billion and $15 billion for TV white spaces deployments in rural areas. It's a cheaper option than other technologies, according to Microsoft.

Low-density areas with less than two people per square mile might use satellite technology. Fixed wireless could be used in areas having more than 200 people per square mile. However, radios tapping TV white spaces could reach about 80 percent of underserved rural populations having two to 200 people per square mile, according to Microsoft's proposal.

Microsoft's proposal might seem modest one, and even somewhat benevolent on its face, but this fight essentially is over the public airwaves leased to corporations by the FCC. It's a fight over established markets and profits held by monopolistic companies, so it might go nowhere, given the current weak federal oversight. The public interest gets raised, but it's typically ignored in the aftermath of the spectrum allocation process, especially in U.S. rural areas, which are viewed as unprofitable markets by service providers.

Microsoft, itself a monopoly, is now trying to face down a much older monopolistic foe with leverage on Capitol Hill. At this point, any results from its campaign may depend more on lobbying dollars than on FCC actions on behalf of the public interest.